The problem has become so acute it may lead to legitimate traders having to lay off staff.
The council was asked to examine the move after a recent survey suggested 30% of all the tobacco consumed in the city was non-duty paid. The survey was carried out on discarded cigarette packets.
While some cigarettes could legitimately be brought into the State through duty-free, the vast majority are being smuggled in from eastern Europe and the Far East.
Kevin Herlihy of Retailers Against Smuggling (RAS), said his organisation had been in talks with the city council and other agencies to tackle the problem.
“They [smuggled cigarettes] are being sold in outdoor markets and also door to door. Not all markets are selling them but some are and it’s damaging legitimate businesses.”
He said a number of small tobacconists had already closed around the city and he was in no doubt it was due to increased smuggling activity.
“The average packet of 20 cigarettes is nearly €10. Out of that the government gets about €8, the manufacturers €1 and the retailer €1. It’s obviously a huge loss to the Revenue but it’s also a major loss to retailers.
These guys [smugglers] are selling cigarettes for around €4 a packet and possibly pocketing up to €3 themselves. They aren’t paying taxes and are putting legitimate jobs at risk.”
Mr Herlihy employs 220 people in his six Centra stores around the city and county.
RAS recently made a presentation to the Cork City Joint Policing Committee and called for action against tobacco smugglers.
They want tougher sentences, the revoking of traders’ licences, and an increased presence by customs officers and gardaí at markets and car boot sales.